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Capital Markets

Capital markets: NYSE-Euronext jumps into Gaap

NYSE-Euronext is capitalizing on regulatory convergence to show issuers some of the benefits that it had hoped its transatlantic merger might be capable of.

The exchange operator is benefiting from a decision by the European Commission in April to accept accounts prepared according to US Gaap accounting rules, without having to reconcile them under IFRS, a costly exercise.

The EC also plans to recognize the accounts of firms from Canada and Korea by 2011 and is considering extending recognition to the new Chinese accounting rules.

NYSE-Euronext has been quick to exploit the decision, launching a new streamlined process to reduce the complexity US issuers face when cross-listing in Europe. The exchange has also made the process cheaper by charging an admission fee of €25,000.

Companies can now be cross-listed either simultaneously at the time of their IPOs or either with or without a capital increase at any point after they are listed, using just one prospectus and set of documentation.

Euronext Paris has already added three US companies for trading, including Anheuser-Busch, the maker of Budweiser beer; tobacco company Philip Morris, and Brookfield asset management, which have all joined the Paris exchange since March this year.

NYSE-Euronext believes the ability to offer issuers easy access to both the US and European markets will make it attractive not only for US companies with strategic ambitions in Europe but also help the exchange compete for IPOs from emerging markets.

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